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The American real estate market was hit hard by extreme weather – from wildfires in Southern California to bitter cold and snow in the Northeast, Midwest and South – at the start of the new year, in addition to the rising cost of housing.
These factors dampened home showings and caused a decline in pending sales in the four weeks ending Jan. 12, according to real estate brokerage Redfin.
Still, Redfin said it’s still “too early in the new year to determine how the 2025 housing market will evolve.”
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Redfin’s Home Buyer Demand Index, which is a seasonally adjusted measure of showings and inquiries other purchase services of Redfin agents, fell 11% month over month, reaching its lowest level since August.
A for sale sign is posted outside of a home for sale on August 16, 2024 in Los Angeles, California. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) / Getty Images)
Pending home sales fell 8.4% year-over-year, the largest decline since October 2023. New listings saw their largest annual decline since September 2023, with a 3.6% decline. on an annual basis.
Active listings increased 9.8% year over year, also the smallest increase in almost a year, according to Redfin data.
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At the same time, the national median housing payment is also at its highest level in more than two months. Home prices jumped 5.8% year-over-year and average daily mortgage rates also hit their highest level since May last week.
In California in particular, home buying demand and listings in metro Los Angeles have increased. was written off due to to the wildfires that started earlier this month.
Homes burn as powerful winds fan the Eaton Fire January 7, 2025 in Pasadena, California. (David McNew/Getty Images/Getty Images)
In turn, Redfin said this is increasing buying and renting demand from those who have been displaced. Notably, pending sales in Los Angeles fell 4% year-over-year and new listings fell 2.5% during the four-week period ended January 12. Redfin doesn’t think the drop would have been as significant if the wildfires hadn’t started.
Redfin also expects larger declines in the coming weeks.
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“Many Redfin agents are focused on helping people find rentals as quickly as possible,” said Susan Brown, a Redfin Premier agent based in Los Angeles. “Because rentals are going so quickly, my advice to people looking for a place to live is to contact a real estate agent directly for help.”
A “For Sale” sign in Crockett, California on June 14, 2022. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
Freezing temperatures and snow in other parts of the country are also keeping shoppers at bay. According to the agency, it also delays homeowners in listing their homes for sale.
